Benefits Budgets Took a Hit in 2008

A Prudential news release said about one-third of companies are maintaining their 2008 budget levels, while another 15% say their budgets have decreased by an average of 16% over last year.

“Employee benefits are especially crucial in uncertain times,” said Lori High, president of Prudential’s Group Insurance business “Plan sponsors need to make the most of both the company’s and the employee’s premium dollars to ensure the benefits can be maintained.” 

Additional trends include:

• Companies hurt by the economy are altering their expectations regarding benefits staffing levels. Those affected most by the recession are forecasting a downsizing of their benefits staff over the next five years.
• Cost-cutting measures are affecting strategic initiatives such as improving employee education and advice.
• Using Internet technology to increase efficiency and control benefits costs will be important objectives by 2014.
  

“The good news is that a majority of plan sponsors and brokers have a positive outlook for 2010,” High said. “Both plan sponsors and brokers expect their companies to be doing better financially a year from now.”
 
The study was fielded via the Internet during April and May and consists of three surveys: one among benefits plan sponsors, one among benefits plan participants, and one among employee benefits brokers and consultants. The surveys were conducted for Prudential by the Center for Strategy Research, Inc., a Boston-based, independent, market research firm.

More study report is available here.